The Impact of Openness and Growth on Poverty in Iran

The main aim of this paper is to compaire the effect of openness، economic growth and the role of government on poverty in Iran. In our model the mean income of the poor (poorest 40% of the population)، is considered to be a function of sum of export and imports to real GDP، foreign direct investment to real GDP، that are used as openness to trade and foreign direct investment indices، real GDP per capita، consumer price index، the share of government consumption in GDP، and the share of government spending on social security in government consumption. The ARDL method is used to stimate the mean income of the poor function for the period 1350-1385 in both short and long-run. The result indicate that in long-run openness to trade helps the poor through a direct distribution effect as well as indirect growth effect. While openness to foreign direct investment has no significant impact on the mean income of the poor. Inflation increase poverty، government consumption reduce poverty in long-run and government spending on social security has no significant effect on mean income of the poor.